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How to Avert a Toronto Housing Market Crash?
Toronto’s real estate market is overheating faster than ever this spring of 2017 and the forecast is for much more price appreciation. The possibility of an economy damaging housing market crash is very real despite a strong economy.
Why is the impending crash a disaster for us? The economy may crash creating unemployment and mortgage defaults, scare off investors, and ruin the home building trend that’s finally taking off.
The Bubble is Spreading Outside the GTA
The heat from the Toronto market is spreading outward into Niagara region, Cambridge and Waterloo/Guelph and up into Barrie. The problem with all of these pressure valves is that the Ontario government’s Evil places to grow legislation is preventing growth in those areas too.
The core problem in the market isn’t out of control demand for housing, because demand for homes by Ontarians has always been present. The government’s arrogance toward people’s need for housing is seen in rising rents, home prices, hopelessness, and homelessness. The Liberal government in particular, is politically opposed to developed. The dreaded conservatives who will form the next Ontario government, may have a different outlook, at least enough to get them voted in.
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The Lack of Housing Stock is Killing Ontario
The crux of the housing bubble in Toronto is lack of housing stock. Building and housing development have been suppressed and unsupported in the GTA region such that any increase in demand, foreign or domestic, would create a home price crisis. It’s our government who have funneled all demand at a limited amount of homes and this creates inflation in the economy (which makes for more short term tax revenue).
Anyway you cut the pie, the government wants to own, control it, and take the biggest piece.
The current attitude of government as you can see in this 2nd video below is irresponsible. Tax manipulation isn’t a solution nor is mortgage manipulation. Only a positive support of new home building will work. Millennials will not forego their family building years and will buy single detached homes or townhouses to live in.
Foreigners will continue moving here and how can the government prevent them from buying homes. Demand is booming and many are saying that a housing crash can’t occur because of that unending demand. But these people have forgotten completely about how much harm government can do as the begin making new policies to solve their previous mistakes.
Demand and Prices Highest in 8 Years: CBC Video
And here’s John Tory from 5 years ago warming how government is driving a problem in the Toronto market, but he goes on to blame foreign investment. Tory still believes in rent controls which would discourage new housing.
It’s a big picture problem driven by government’s desperation for tax revenues which they then squander on pet projects that only make the problem worse. Now that we’re more sure of the origin of the problem, we can begin brainstorming some last minute solutions to ward off a housing crash.
11 Good Ways to Avert the Toronto Real Estate Bubble and Crash
The Toronto housing bubble is underway and heading toward an explosive burst. Here’s some solutions:
- Cancel the Places to Grow legislation
- penalty/fee for empty condos or homes
- severely restrict or disable the Ontario Municipal Board and change their mandate to support development not to prevent it
- give home builders generous new incentives and tax breaks for building outside of Toronto
- push builders and developers out into towns outside of the GTA
- provide tax incentives for businesses to relocate to communities outside of the GTA
- raise taxes on land gobbling monster homes and private estates
- lower taxes on townhouses and low rise condos
- cancel all land transfer taxes for the immediate future
- provide tax incentives for real estate investment in new projects
- tax break for home sellers to move onto retirement and moving to lower cost regions
These incentives and actions would encourage mobilization of government and money to create new homes and take the pressure off the Toronto and Mississauga areas.
Chime in on how you would solve the Toronto housing bubble pressure and avert a crash that’s looming.
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